Re: Segate's 10% Workforce Cut
Robert,
Can you give us some of your erudite commentary regarding the latest news out of Seagate. Especially the section under the, "For Singapore," sub-title. Appreciate your comments.
MikeM(From Florida)
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Seagate Technology Likely to Fire 1,600 Workers in Singapore, 10% of Staff
By Claire Leow
Seagate Technology May Cut 1,600 Singapore Jobs, 10% of Staff
Singapore, Aug. 24 (Bloomberg) -- Seagate Technology Inc., the world's largest independent computer disk drive maker, may soon cut 1,600 jobs, or 10 percent of its Singapore workforce, looking to cap costs as competition in the industry heats up.
The firings at four Seagate plants are likely to take place in the next three weeks, the Business Times reported, without citing sources. Seagate, among the top three private employers in the island state, has informed the government of the job cuts.
A Seagate spokeswoman in Singapore said the company is reviewing its operations worldwide in a restructuring move that would eliminate jobs in the year ending June 2000. She declined to confirm or deny the number of jobs to be slashed in Singapore. ``Everybody in the disk drive industry needs to get leaner,' said Mark Geenen, chief executive of TrendFocus, a Palo Alto, California company that tracks the disk drive industry. ``There is a structural change going on.'
For Singapore, the likely Seagate job cuts would follow close on the heels of rival Western Digital Corp.'s staff cuts earlier this month. The world's No. 3 computer disk-drive maker, will cut 2,500 jobs, or 60 percent of its Singapore workforce, as it moves manufacturing to neighboring Malaysia to trim costs.
Most disk drive companies have operations in Singapore, which produces about two-fifths of the world's supply of the computer component.
Seagate Woes
In January 1998, Seagate cut 1,800 jobs in Singapore, part of the 10,000 staff it reduced worldwide.
Any new firings would likely result in a charge for the fist fiscal quarter for Seagate. In July, the company warned that it will likely post a loss in the quarter from heightened price competition. In the fourth quarter ended July 2, Seagate reported a lower-than-expected profit from operations of $69 million, or 30 cents a share.
Disk-drive makers, whose devices store information and programs on computers, are battling to keep or expand market share as prices on personal computers fall.
The Seagate spokeswoman disputed the BT report that one factory, staffed by 2,500 workers, may be converted into a warehouse and its production transferred to Malaysia and Indonesia. The plant is in Senoko, in northern Singapore, and makes printed circuit boards and other components.
For Singapore
The Seagate cuts are unlikely to hugely affect the island state's export revenue, analysts said. ``Seagate is still doing new low-end models and high-end drives so we won't see a drastic fall-off in terms of the volume of Singapore's disk drive exports,' said Tham Mun Hon, an economist at Skandinaviska Enskilda Banken. ``It's widely accepted that this is the trend in the disk drive industry.'
Besides, some disk drive makers are stepping up high-end production in Singapore. In April, Japan's Matsushita Electric Industrial Co., the world's largest consumer electronics company, said it plans to invest S$450 million (US$259.5 million) in the next three years, most of that for expanding production of computer disk drives for the U.S.'s Quantum Corp. Matsushita has 12,900 workers in Singapore, and is one of the city state's biggest employers.
In February, Maxtor Corp., another drive maker, agreed to buy a 350,000-square-foot building to step up production when needed.
Additionally, the government is promoting the chemicals industry, which should help diversify Singapore's manufacturing sector, Tham said.
The government has raised its full-year economic forecast to as high as 5 percent this year, as the country recovers from its first recession in 13 years. Electronics products account for two-thirds of the island's exports, and the largest single export item is disk drives used to store computer data. |
